Pakistan Budget Seen Lackluster

By

Tom Wright

June 4, 2011

ISLAMABAD—Pakistan unveiled its budget for the year beginning July 1 but failed to take drastic steps to raise taxes on the country's elite, a move that the U.S., the International Monetary Fund and other donors say is needed to slash an unsustainable budget deficit.

Finance Minister Abdul Hafeez Shaikh forecast a budget deficit of 4%, down from 6% in the current fiscal year, with economic growth rising to 4.2% versus 2.5%. In the most noteworthy new measure, Mr. Shaikh said the government was ending sales-tax exemptions...